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Xbox completes another profitable year as Xbox Live grows 15%

Microsoft has just announced its fourth quarter and full-year fiscal results for the period ended on June 30, and the numbers showed some positive sales growth for the Entertainment and Devices division, which houses the Xbox business. For the fourth quarter, sales grew by 20 percent, totaling $1.78 billion and for the year, revenues climbed from $8.92 billion to $9.59 billion.

While sales were up, profits were actually down for both the fourth quarter and the fiscal year. Q4 saw a net loss of $263 million (as compared with a net income of $11 million a year earlier). On the bright side, the full year finished in the black with total income of $364 million (down from $1.26 billion a year ago).

Microsoft attributed much of its revenue gains in Q4 to the addition of Skype. Xbox Live membership also grew by 15 percent, the company said. 1.1 million Xbox 360 consoles were shipped during the fourth quarter, down from 1.7 million during the fourth quarter of fiscal year 2011. "Even in the soft console market, Xbox 360 maintained its market share leadership position in the US," Microsoft boasted.

Overall, Microsoft had another record fourth quarter for revenue, hitting $18.06 billion. "We delivered record fourth quarter and annual revenue, and we're fast approaching the most exciting launch season in Microsoft history," said Steve Ballmer, chief executive officer of Microsoft. "Over the coming year, we'll release the next versions of Windows, Office, Windows Server, Windows Phone, and many other products and services that will drive our business forward and provide unprecedented opportunity to our customers and partners."

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2 Comments

Microsoft are a software company, they are not a game company or a hardware company. They only do these other things because they are forced to.
The Xbox project was Microsoft's plan to take over the living room in the same way that they own the desktop worldwide.
With this is mind they invested more in creating Xbox LIve than they did in creating the original Xbox. The hardware didn't matter because they always had the backstop of opening the service to other hardware manufacturers.
Initially Live concentrated on games because this was a business model that gave them penetration. But they have assiduously added everything else to create a complete content delivery system for the living room that is unmatched by any competitor.
They are now moving to the mobile phone business model for Live to further widen their appeal. Buy the service and get subsidised hardware.
The next big change will be the adoption of the Windows 8 kernel in Xbox Live, to integrate it with tablets, mobile and the desktop. With this the Live experience will become available on a vast number and range of devices. With one subscription you will be able to play games on your television, movies on your tablet, music on your phone and do conference video calls on your PC. Plus literally thousands of other options.
Microsoft have a grand strategy and it is paying off,
What will be fascinating will be how much the 720 becomes just a Live box and far less a stand alone gaming device.
And of course other hardware manufacturers will have access to the Live service. Devices like the upcoming Nokia tablet.
Because, ultimately, Microsoft don't want to be in the hardware business. Things like RROD are not where Microsoft want to be.